Question

Tesla: Current Issues

Tesla announced the delay for “Model 3” production, again.

Since March 2016, half a million people have preordered the vehicle.

In February 2017, the company said it would be able to produce 5,000 vehicles a week, but in November Musk called it a “production hell” and pushed back productivity until the end of March 2018.

In January 2018, the goal post moved again, until the end of June.

In March of this year, people received emails stating that the company was adjusting their “Model 3” delivery to a later window of late 2018 or early 2019.

Not delivering orders is not a great way to build a loyal customer base.

Issues. Continued...

Workers bring complaints about mistreating employees and harassment.

Workers have also complained about aggressive production goals leading some to “pass out” on production floors.

Workers claim that their health is secondary to tesla productivity.

Tesla is Spending more money than generating.

After 10 years of losses, in 2013 Tesla announced its first-ever quarterly profit. Then in February 2018, the company announced that it ended 2017 with its largest quarterly loss ever. $675 million

Workers bring complaints about mistreating employees and harassment.

Workers have also complained about aggressive production goals leading some to “pass out” on production floors.

Workers claim that their health is secondary to tesla productivity.

Tesla is Spending more money than generating.

After 10 years of losses, in 2013 Tesla announced its first-ever quarterly profit. Then in February 2018, the company announced that it ended 2017 with its largest quarterly loss ever. $675 million.

Ethical Quandaries

Ethical Principles (Steiner & Steiner)

The Organization Ethic- Be loyal to the organization. ( Model 3 ongoing delays )( Employee Mistreatments)

The Rights Ethic- Each person has protections and entitlements that others have a duty to respect. ( Employee Mistreatments )

The Theory of Justice- Each person should act fairly toward others in order to maintain the bond of community. ( Employee Mistreatments )

The Doctrine of the Mean- Avoid behavior that is excessive or deficient of a virtue. ( Twitter Bankrupt Jokes )( Employee Mistreatments )

The Intuition Ethic- What is good or right is understood by an inner moral sense and felt as intuition. ( Model 3 ongoing delays )( Vehicle Malfunctions )( Employee Mistreatments)( Twitter Bankrupt Jokes )

Global Business Standard Codex

Fiduciary Principle- Duty to act in the best interest of stakeholders.( Model 3 ongoing delays )( Vehicle Malfunctions )( Employee Mistreatments)( Twitter Bankrupt jokes )

Reliability Principle- Duty to honor commitments made to the firm/ organization. ( Model 3 ongoing delays )( Vehicle Malfunctions )( Employee Mistreatments)( Twitter Bankrupt jokes )

Transparency Principle- Duty to conduct business in a truthful and an open manner. ( Model 3 ongoing delays )( Vehicle Malfunctions )( Employee Mistreatments )

Dignity Principle- Respect the dignity of all individuals. ( Employee Mistreatments )

Fairness Principle- Stakeholders have a vested interest in the firm and should be treated fairly. ( Model 3 ongoing delays )( Vehicle Malfunctions )( Employee Mistreatments)( Twitter Bankrupt jokes )

Analysis of how to deal with the quandaries?

Answer 1

Tesla is in a situation where it needs to strike balance between two contradicting scenarios

(a) It needs to honour the customer commitment by delivering their products on time, keep their word in line with the reputation it enjoys in the opinion of the customers. It also needs to be answerable to its shareholders and other stakeholders who require the company to be profitable through icreasing efficiency in the operations and keeping up with schedules. It needs to be open in its business and communicate effectively with the customers, being transparent in its approach, apologising them for delay and apprising them of future course if action.

(b) It needs to care for its employees who sweat day and night to work for it by providing them excellent work environment, ethical treatment, admissible levels of hygiene and work related satisfaction among them while still being productive enough to meet its business goals.

To overcome its dilemma, it must first focus on wellbeing of employees because an unhappy employee can never lead to manufacture of good products. secondly, it should address its issues of vehicle malfunction and overshooting of delivery schedules by making suitable business decisions of capacity enhancement, productivity improvement and resource utilisation to be profitable sustainable and dependable in the view of customers and prospective buyers.